Thank you for visiting our “Top 5 Delivered by DHL” series. It’s a fast and informed way to learn more about global topics that affect your business. We’ll start by delivering you insights on TPP, Brazil, NAFTA, Global E-Commerce, International Business Travel, Avoiding Import Delays, Cuba Sanctions and Chile, Peru, and Colombia. Visit our YouTube Playlist.
Below, we present our first video: “Going Global.”
Stay small while you go big
Between numerous government initiatives and the ongoing explosion of e-commerce and technology, there has never been a better time for small businesses to set their sights on international markets. In fact, more than 75 percent of the world’s purchasing power resides outside of the United States, so for small businesses looking to grow, barriers are shrinking.
International expansion is a way to add new customers and revenue with little impact to your fundamental business model. In fact, DHL Express conducted a study that showed that small and medium-sized businesses that trade in international markets are likely to perform better than their single-market counterparts.
So what does it take to expand your business beyond our borders and get an edge on the competition? Here are five things you need to do before going global.
1. Research markets
Setting your sights globally takes time and research. Companies should determine where they want to do business and how business is done in those countries to avoid mistakes. You’ll need to familiarize yourself with shipping rules, business practices, culture, currency and product demand. Export.gov has market research and “Doing Business In” guides that can help get you started.
2. Create a strategy
The key to trade success is developing an effective export/import strategy. Choosing a logistics partner that is experienced in global trade and cross-border transportation can really help, along with making sure your business is equipped to handle the stresses of going global. Additionally, an effective logistics partner should be capable of assisting with contingency planning, by offering direct support and guidance. Should a financial or natural disaster affect your ability to deliver goods to customers overseas, you must have a plan in place to recover quickly.
3. Understand that one size doesn’t fit all
Customs regulations vary from country to country. For instance, Algeria bans the import of used construction equipment and 400+ medicines, Nigeria says no to plastic flowers and Argentina won’t allow maps in GPS systems.
Business association websites as well as U.S. trade departments and chambers of commerce are great resources to help you understand Customs regulations.
4. Determine your product’s export potential
If your company is successful in the U.S. market, there is a good chance that your product or service will also sell well in markets abroad—at least in those markets where similar needs and conditions exist. But it may require a different marketing or branding approach to fit the local market.
DHL Express commissioned research to help small and medium-sized businesses determine if it was in their best interests to make the leap into expanding globally. By analyzing a variety of factors, the research can help business leaders who are at the edge either dive in or confidently shift directions. Dr. Donald Lessard from MIT conducted research using a capabilities test to determine whether several sampled companies should or should not take the international plunge. Known as the “RAT Test,” it assesses a company’s international viability through a series of pre-qualifiers: Relevant, Appropriable and Transferable. For more information on the findings, view the research paper in its entirety at www.simplydhl.com/takeitglobal.
5. Have capital readily accessible
Make sure you have capital readily accessible for all stages of the process – and then some! Waiting for payments can take longer when shipping internationally, as can currency conversions.
National Export Initiative (NEI) offers a direct platform for companies to research international trade strategies and locate financing opportunities. Linked with the NEI, the Office of the U.S. Trade Representative also offers valuable resources.
For an overview of the top five things you need to know before going global, check out the Top 5 Delivered video above. To watch more Top 5 Delivered videos, click here.
Have more questions about what it takes to go global? Send us what you’d like to know at @DHLUS.